George was the Kansas City Fed's No. 2 official under Hoenig, who retired last year. She joined the Fed in 1982, spent much of her career in bank supervision and became first vice president in 2009.

From 2001 to 2009, she was senior vice president in charge of the Division of Supervision and Risk Management, overseeing regulation of the Kansas City Fed district's 170 state-chartered member banks and almost 1,000 bank and financial holding companies. She worked in Washington in 2009 as acting director of bank supervision for the entire Fed system.

The recovery following the recession that lasted from 2007 to 2009 has been "uneven and underwhelming," George said.

"With moderate economic growth have come modest job growth and a too-high unemployment rate, in addition to lingering doubts about whether the recovery is sustainable," she said.

Payroll growth in the U.S. beat forecasts in December and the unemployment rate dropped to the lowest level in almost three years as the economy gained strength heading into 2012, the Labor Department said last week.

Final Month

Employers added 200,000 jobs in the final month of 2011 and the jobless rate fell to 8.5 percent, down from 9 percent in September and 9.4 percent in December 2010.

For all of 2011, employers added 1.64 million workers, the best year for the American worker since 2006, after a 940,000 increase in 2010. Even with the gains, little headway has been made in recovering the 8.75 million jobs lost as a result of the recession that ended in June 2009.

Only part of the economy's weak growth can be attributed to temporary factors such as the natural disaster in Japan, political turmoil in the Middle East and the fiscal debt crisis in Europe, George said.

"A considerable drag on the recovery remains the consequences of the buildup in leverage leading to the financial crisis," she said. "All of this suggests a moderate recovery remains the most likely outlook, depending on developments in Europe and Asia's economies, as well as U.S. fiscal policies that have yet to be defined," she said.